Dana invests in Egyptian gas

New joint venture, Danagaz Bahrain, and Egyptian Natural Gas Holding to build gas liquids plant in Gulf of Suez.

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By  David Ingham Published  November 1, 2006

Dana Gas has taken a controlling stake in a Bahrain-registered company that will be named Danagaz (Bahrain). The company will be 66% owned by Dana Gas and 34% by a number of Bahraini partners. Its first project will be the development of a gas liquids plant in Egypt’s Gulf of Suez. The plant will be owned by Danagaz (Bahrain) and state-owned Egyptian Natural Gas Holding Company (EGAS). “This is an important strategic step for Dana Gas from several perspectives,” said Rashid Saif Al-Jarwan, general manager of Dana Gas. “Firstly, we join with highly reputable partners in Bahrain, where we plan to develop further projects in the natural gas business. “Secondly, it leads to our first investment in Egypt, a country with over 70 trillion cubic feet of natural gas reserves and growing, with a promising business environment for further investments in this important strategic sector. Last but not least, the Gulf of Suez Gas Liquids Plant enters Dana Gas into a long-term joint-venture partnership with an important and esteemed organisation in the region’s energy industry: the Egyptian Natural Gas Holding Company (EGAS).” The plant will be capable of processing 150 million cubic feet per day of natural gas and will produce approximately 120,000 metric tonnes per year of propane and butane in liquid form. The joint venture company will also undertake the export and marketing of the liquid petroleum gas products as the plant comes into operation. The consortium has signed an agreement for a fifteen-year supply of natural gas feedstock for the plant with the Egyptian General Petroleum Corporation (EGPC), with the option of an extension. Separately, Dana Gas is reported to be in negotiations with Iran to resolve its dispute over a gas supply deal. Plans to import gas to Sharjah from an Iranian field have been on hold because Iran has demanded a higher price for the gas than was originally negotiated. Reports suggest Dana will accept Iranian demands for a higher price.

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